Morning wrap (10.06.2026)

The United States and Iran carried out direct military strikes overnight, marking the most serious escalation since the conflict began. Iran shot down a U.S. Apache helicopter over the Strait of Hormuz, prompting U.S. strikes against Iranian air defense systems, radar installations, and command centers.

Tehran then launched retaliatory attacks against U.S. military bases in Bahrain, Kuwait, and Jordan. The conflict has clearly expanded beyond the Hormuz area, evolving into a broader regional confrontation.

Iran claims to have targeted a total of 21 sites associated with U.S. air and naval bases across the Middle East. The most significant target was reportedly the Al-Azraq Air Base in Jordan, including F-35 fighter hangars and command infrastructure. Reports also indicate drone attacks on Ali Al Salem Air Base in Kuwait and the U.S. Fifth Fleet headquarters in Bahrain. This demonstrates Tehran’s willingness to strike strategic U.S. military assets deployed across multiple countries in the region.

U.S. forces conducted three waves of precision strikes against Iranian military facilities near the Strait of Hormuz. Targets included installations on Qeshm Island, as well as sites in Sirik, Jask, and Bandar Abbas—the main naval command center of the Islamic Revolutionary Guard Corps (IRGC) responsible for operations in Hormuz.

Despite the significant military escalation, oil prices in Asia rose by only around 1%, and are currently declining by approximately 0.60–0.70%, with WTI and Brent trading near $88 and $91 per barrel, respectively. Such a muted reaction suggests that investors are waiting for confirmation of reports, an assessment of the extent of the damage, or signals that diplomatic channels remain open.

U.S. crude oil inventories declined for an eighth consecutive week. Yesterday’s API data showed a draw of 9.12 million barrels, while gasoline inventories also fell. This indicates that the U.S. fuel market is becoming increasingly tight even before the latest escalation of the conflict.

Japanese wholesale inflation reached its highest level since March 2023 in May. Import prices measured in yen rose by 25.5% year-over-year, marking the fastest pace since November 2022. This is particularly challenging for an economy heavily dependent on imported energy commodities.

China’s Producer Price Index (PPI) increased by 3.9% year-over-year in May, reaching its highest level in nearly four years and exceeding market expectations.

At the same time, consumer inflation (CPI) remained at 1.2% and came in below forecasts, while core inflation slowed further. This points to strong cost pressures at earlier stages of production alongside limited ability to pass those costs on to consumers. Higher producer prices in China could gradually feed through into global supply chains.